International public procurement: a new instrument to support EU firms

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The Trade Committee adopted its position on the draft international procurement instrument aimed at restoring the balance of opportunities for EU companies tendering outside the EU.

The proposed International Procurement Instrument (IPI) introduces measures limiting the access to open EU public procurement tenders of non-EU companies from countries that do not offer similar access to EU companies. According to the text approved on Monday by 36 in favour, no votes against and six abstentions and announced on Tuesday, the instrument would empower the Commission to determine whether and to what extent companies from a third country must be subject to an IPI measure. The IPI aims to encourage the opening of these protected markets.

Trade MEPs backed the overall aim of the instrument, but they tweaked its design, scope and member states’ discretionary powers in its application.

EU tools to remedy unequal access, with fewer exceptions

MEPs agreed to two types of IPI measures that the Commission can choose from to remedy unequal access to public procurement markets: adjusting the score of the bids put forward by companies subject to a IPI (without affecting the price to be paid by the successful bidder), or excluding the company from bidding.

In addition, the committee reduced to two the number of exceptions when contracting authorities can opt out from IPI measures: when all bids come from companies from countries subject to an IPI measure; and in cases where the public interest overrides IPI considerations, such as in areas of public health or environmental protection. Trade MEPs also insist on exempting companies from least developed countries and vulnerable developing countries.

The Trade Committee also brought all European public contracting authorities under the scope of the IPI to ensure the uniform application in all EU countries.

More tenders affected

MEPs agreed to establish different thresholds to determine which procurement procedures are subject to an IPI measure: those worth at least €10 million for works and concessions and €5 million for goods and services.

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“The vote on the IPI is an important signal both to our European companies and to our partners in third countries: the lack of a level playing field has persisted for long enough. The Committee on Trade is committed to making sure that European bidders will have the same access to public procurement markets in third countries as third country bidders have in the EU. We have worked fast by completing our processes in less than three months. Parliament will keep up this pace with a view to concluding trilogue negotiations in spring 2022,” said rapporteur Daniel Caspary (EPP, DE).

Next steps

The adopted draft report will be tabled to a plenary vote in January, after which inter-institutional negotiations can start.

Background

The EU has opened its public procurement markets to a significant degree to competitors from third countries and has been advocating for the end of protectionist measures on international public procurement markets. Major EU trading partners have different degrees of restrictions curbing EU companies’ access to their public procurement markets.

Parliament has been working on the file since the Commission original proposal in 2012, then modified in 2016. Member states only reached an agreement on the topic in June 2021.